Zynga Says It No Longer Plans To Make Games That Require Real Money To Play

Zynga announced today that it no longer plans to make games that require real money to play.

This is a huge shift in Zynga's thinking, and its stock is tanking in after-hours trading.

Many had been banking on Zynga to create pay-to-play games to boost revenue. That included online gambling.

Instead, Zynga will continue making free social games with ads and in-game purchases.

So what happened? First, Zynga has a new CEO, former Microsoft Xbox boss Don Mattrick. It's possible he wasn't too keen on pursuing online gambling.

Basically, Zynga is staying the course and hoping that it can come up with mega-hit games that encourage players to look at ads or buy virtual goods.

Here's the statement from its earnings report for the second quarter of 2013:

Zynga believes its biggest opportunity is to focus on free to play social games. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.